# ED Cracks Down: Reliance Power CFO Ashok Kumar Pal, Anil Ambani's Key Aide, Arrested in ₹68 Crore Fake Bank Guarantee Scandal
October 12, 2025**
In a dramatic escalation of India's ongoing corporate fraud crackdown, the Enforcement Directorate (ED) has arrested Ashok Kumar Pal, the Chief Financial Officer (CFO) and Executive Director of Reliance Power Limited (RPL)—a flagship company of the Anil Dhirubhai Ambani Group (ADAG)—in a high-stakes money laundering probe. The arrest, which occurred late Friday night in Delhi after hours of intense questioning, centers on an alleged ₹68 crore fake bank guarantee racket that allegedly facilitated fund diversions and bogus invoicing. Pal, a trusted lieutenant of industrialist Anil Ambani, was remanded to two days' custody by a Delhi court, marking yet another blow to the beleaguered Reliance ADA Group amid a cascade of financial scandals.
This development not only underscores the ED's relentless pursuit of white-collar crimes but also reignites scrutiny on the Ambani empire's legacy of debt and alleged malfeasance. As Reliance Power scrambles to distance itself—claiming victimhood in a "fraud and forgery conspiracy"—the arrest raises broader questions about governance, regulatory oversight, and the ripple effects on India's power sector. Let's dive into the timeline, allegations, and what this means for the players involved.
## The Arrest: A Midnight Takedown in Delhi
Pal, who joined Reliance Power as CFO on January 29, 2023, was summoned to the ED's headquarters in Delhi for interrogation earlier this week. What began as routine questioning spiraled into a formal arrest under Section 19 of the Prevention of Money Laundering Act (PMLA), 2002, late on October 10. Produced before Special Judge Kiran Gupta at Patiala House Court the next morning, Pal's legal team argued the arrest was "illegal" for lacking prior court permission—a claim the court dismissed, granting the ED two days' custody for deeper probing. He is scheduled to reappear in court on Monday, October 13.
The ED alleges Pal was a linchpin in a sophisticated fraud involving fake bank guarantees (BGs) submitted to the Solar Energy Corporation of India (SECI) for a Battery Energy Storage System (BESS) tender. The dubious ₹68 crore BG, purportedly from FirstRand Bank's Manila branch (which doesn't exist), was allegedly routed through shell entities like Biswal Tradelink Pvt Ltd. Investigators claim Pal approved fund releases and paperwork via unofficial channels like Telegram and WhatsApp, bypassing the company's standard SAP/vendor master systems—red flags for deliberate concealment.
This isn't an isolated incident; it's part of a sprawling ED investigation into a ₹17,000 crore loan fraud linked to Yes Bank and other lenders, where ADAG entities allegedly diverted funds through circular lending and related-party transactions. The probe traces back to an FIR filed by Delhi Police's Economic Offences Wing (EOW) on November 11, 2024, exposing a fake BG syndicate charging 8% commissions. Fake domains mimicking banks like SBI (e.g., sbi.17313@s-bi.co.in) were used to spoof legitimacy, per ED findings.
Social media buzzed with reactions post-arrest, with users like @RT_India_news highlighting the "$8 million fake bank guarantee" angle and @bsindia breaking the news of Pal's immediate resignation. Hashtags like #EDArrest and #AnilAmbani trended, amplifying calls for accountability in corporate India.
## Reliance Power's Swift Response: Resignation and Victim Narrative
In a BSE filing Saturday evening, Reliance Power announced Pal's abrupt exit: "Ashok Kumar Pal, Executive Director and Chief Financial Officer of the Company has been arrested by ED. Pending the ongoing matter and in order to assist the investigation, Pal has demitted the office of Executive Director and CFO with immediate effect." A formal resignation letter is forthcoming, with full SEBI disclosures promised.
The company doubled down on its innocence: "The company and its subsidiaries acted bona fide and are victims of fraud, forgery, and a cheating conspiracy." RPL emphasized that the fake BG was submitted unwittingly, and it's cooperating fully with authorities. This stance echoes broader ADAG defenses amid mounting probes, but skeptics point to Pal's board-authorized role in signing SECI documents as evidence of deeper complicity.
Market reaction was muted yet telling: RPL shares, which had surged 14% the day prior on unrelated power sector optimism, dipped 2-3% in early trading post-news, reflecting investor jitters over governance risks. With 75% public shareholding, such volatility underscores the fragility of trust in Ambani-linked firms.
## The Bigger Picture: ADAG's Trail of Troubles
Pal's arrest is the second major ED detention in the ADAG ecosystem, following probes into a ₹12,524 crore laundering case tied to Reliance Home Finance Ltd (RHFL) and Reliance Commercial Finance Ltd (RCFL), where loans allegedly funneled back to group entities. It dovetails with:
- **SBI's Fraud Tag**: In June 2025, State Bank of India classified loans to Anil Ambani and Reliance Communications (RCom) as fraudulent, citing fund diversions and covenant breaches. The Bombay High Court upheld this on October 8, 2025, dismissing Ambani's plea.
- **CBI-ED Synergy**: The Central Bureau of Investigation (CBI) filed FIRs and chargesheets against RCom and ADAG for multi-crore bank frauds, with ED attaching assets worth thousands of crores.
- **Bank of Baroda Echo**: Similar fraud declarations for RCom accounts, triggering further scrutiny.
Once a telecom and power behemoth, ADAG's empire crumbled post-2019: RCom entered bankruptcy, Anil Ambani faced personal insolvency (later resolved via settlements), and group debt ballooned to ₹1.5 lakh crore. Critics argue these cases reveal systemic issues—evergreening loans, shell companies, and opaque dealings—that regulators like RBI and SEBI must address more aggressively.
## Implications: A Reckoning for Corporate India?
For Anil Ambani, this arrest is a personal gut-punch; Pal was not just a finance head but a strategic aide navigating RPL's deleveraging efforts amid stalled projects and cost overruns. It could embolden lenders to tighten screws on outstanding dues and stall revival talks. Broader ripples? Heightened ED vigilance might deter risky financial maneuvers across conglomerates, but it risks chilling legitimate investments if probes drag on.
On the flip side, Reliance Power's "victim" claim, if substantiated, could spotlight vulnerabilities in public tender processes—SECI's BESS initiative aims for green energy goals, yet fake BGs undermine credibility. As X user @sourabhwadhwa22 noted, this ties into a "broader ₹17,000 Cr ADA Group probe," signaling more shoes to drop.
In the end, Pal's custody is a stark reminder: In Modi's India, no tycoon is untouchable when fraud allegations surface. Will this catalyze reforms, or just another chapter in ADAG's saga? As the ED digs deeper, one thing's clear—transparency isn't optional; it's survival.
What are your thoughts on the ED's role in corporate cleanups? Share in the comments.
*Sources: The Indian Express, Times of India, Economic Times, Republic World, Business Standard, and X ecosystem updates. All facts verified as of October 12, 2025.*
